Declining Trend Prevalent in Short Sea Shipping

The declining trend in short sea shipping that started developing in early April and has rapidly taken hold since continued in the previous week as well, HC Shipping’s said in its weekly commentary.

As explained by HC Shipping, there is a clear imbalance in the supply/demand equation with a significant volume of spot tonnage available and apparently struggling to find cover.

The rate of descent has slowed a bit over the last couple of weeks but the pressure remains downward nonetheless and rates were at best static or more often further down against last done.

In addition, there’s a noticeable sense of surprise at how quickly the market appears to have dropped away, especially after showing genuine improvement in February and early March and from a position where expectation was becoming quite bullish and many were confident of a continuing upward trend.

The reality has been the opposite and conversely that is now eroding confidence and creating growing uncertainty. Even the Baltic, normally one of the most buoyant sectors, is reported as unusually flat with limited demand at present.

Again the short term outlook has to be for more of the same, for reasons outlined previously. Given the time of year and the looming summer holidays it is impossible to see where a turnaround is going to come from at this point and even if demand were to pick up again there would be a limited amount of time before any momentum would undoubtedly be lost once again.

In view of that, a flat or gradually declining trend into July/early August seems the far more likely at the moment.

HC Shipping, May 29, 2014

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